Every weekend, the Financial Post breaks down the most interesting developments in this week’s world of investing, from top performers to surprising analyst calls and stocks you should have on your radar. Here’s this week’s edition.

Stock of the Week: Tariffs have Lululemon feeling stretched

Shares of Lululemon Athletica Inc. (LULU) fell nearly 20 per cent on Friday to close the week at US$265.27. The maker of fashionable workout gear and leisure clothing, which reported earnings on Thursday, said that sales fell in its Americas market in the first quarter and that it is already seeing lower traffic, especially in the United States as tariffs rattle price-conscious consumers. The company issued worsening guidance for the second quarter projecting sales and profit below analyst estimates and trimming its earning outlook for the year and also warned it would have to raise prices. Besides the tariff headwinds, the Vancouver-based athleisure company is also facing more competition and shifting fashion trends. A report from Veritas Investment Research last month had warned that Lululemon was exposed to the trade war on a few fronts, with 50 to 60 per cent of its sales coming from the U.S. and most of its manufacturing happening overseas. Following the earnings release, analysts at Deutsche Bank, Jeffries and Co., and JPMorgan Chase & Co., were among those who cuts their price targets for the company.

Can the TSX keep motoring?

Can Canada’s premier stock market keep its hot streak going? That’s the question prominent Bay Street economist David Rosenberg asked and answered in a note out this week. The S&P/TSX composite has been on a tear outpacing the S&P 500 by 12 percentage points over the last year. From June 2024, when Rosenberg noted “the fortunes of the two indices began to diverge,” the TSX has risen 22.1 per cent compared to a 10 per cent gain for the S&P 500, in local currency, though the latter is ahead on a U.S. dollar basis. On the way to these gains, the TSX also hit a fresh record close above the 26,000 threshold on May 26. “Victory laps aside, what matters most to investors at this time is where we see the outlook from here,” Rosenberg wrote. He thinks the conditions are in place for the TSX to keep rising, albeit at a slower pace. Among his reasons, Bank of Canada interest rate policy is more accommodative than U.S. monetary policy and with more cuts expected in the second half of the year that means more liquidity. “Relative stability is being rewarded in Canada,” Rosenberg said as the outlook for earnings per share growth has held up while in the U.S. it’s been scaled back.